A Weighty Matter
Those of you who are overweight may have considered joining the Weight Watchers
programme but have probably not thought about the VAT implications!
Customers are asked to attend weekly meetings at which they are weighed. They are given an initial handbook, a monthly magazine and weekly leaflets. In 2004 Customs issued a ruling to Weight Watchers UK Ltd that part of the consideration paid by customers could be attributed to this zero rated printed material. In 2005 they withdrew this advice and ruled that the company was making a single supply of a standard rated weight loss programme and that it had to account for VAT on all the takings.
The company appealed and in March 2007 a VAT Tribunal allowed the appeal, holding that the company was making multiple supplies and that the consideration should be apportioned.
Whilst this is good news, it does illustrate one of the most difficult areas of VAT – when you bundle together goods or services with differing VAT rates, are you genuinely making multiple supplies at different rates or as HMRC will usually argue citing the case of Card Protection Plan, a single supply with the other items being merely ancillary or incidental to the main supply. We would be interested to hear of your own experiences in this area.
Date: 30th April, 2007
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